Pages

Thursday, May 31, 2007

Is it wrong for me to use your trademark?Is it wrong for me to use your trademark to attract traffic to my website, if no one sees me using your trademark?

This is a contentious issue that the courts have struggled with.Of course, the use of trademarks in domain names has been explosively contentious, driving DNS policy.The use of a trademark in a domain name is a very visible use of the mark, in an environment where the supply of available opportunities to use the mark is limited (there are only so many dot-coms after all; there is dot-com, dot-biz, dot-ccTLDs, dot-org, dot-edu, dot….Well, okay there are more opportunities now then there use to be and there would be a lot more opportunities if ICANN would approve more gTLDs).The DNS-Trademark contention has led to the creation of the Uniform Dispute Resolution Policy, the AntiCybersquatter Protection Act, the Fraudulent Online Identity Sanctions Act, lots of trademark litigations, and lots of activity before the World Intellectual Property Organization (WIPO).

But here we deal with the stealth use of trademarks.No human sees them.No human is getting confused by the ALPHA trademark that appears super-glued to BETA’s product.

Let’s start with the easy model: metatags.And by “easy,” here I mean the courts have a sort of rough consensus on outcome.In these cases, website owners insert trademark terms into the metatags of their webpages.After search engine spiders crawl and index these pages, the metatags will act as trigger-terms, causing the webpage in question (at least in theory) to appear in search results when that trademark is typed into a search engine (rumor has it that a lot of search engines now simply ignore metatags).The courts have generally thought that this use of metatags does not constitute playing nice.

Courts needed to find a confusion between plaintiff’s invisible trademark and defendant’s products, and in order to do this, they have relied on something known as Initial Interest Confusion.This doctrine was well articulated in the case Brookfield Communications v West Coast Entertainment, 174 F.3d 1036 (9th Cir. 1999).Of course, everything was well articulated in Brookfield; dare read that case only if you have a pot of coffee and a lot of spare time on your hand.

In Brookfield, according to the court opinion, plaintiff Brookfield gathered and sold information concerning the entertainment industry.One of its products is a searchable database called “MovieBuff,” which it began to sell in 1993.In 1996, Brookfield attempted to register the domain name moviebuff.com but had been beaten to the punch by defendant.So Brookfield registered “moviebuffonline.com,” set up a website, and sold its MovieBuff software.In 1997, Brookfield registered “MovieBuff” as a trademark.

As for defendant, West Coast, a video rental store chain – it had registered the domain name moviebuff.com in 1996 and had launched its website moviebuff.com in 1998 (I will not confuse you with other facts such as West Coast had acquired a service mark for “The Movie Buff’s Movie Store” in 1991,had marketed goods and services since 1988 using the term “Movie Buff,” or that the court concluded that defendant’s “Movie Buff’sMovie Store” mark was different than plaintiff’s “MovieBuff” mark because of the spaces between the words – and therefore not prior – but that defendant’s moviebuff.com domain name was identical to plaintiff’s “MovieBuff” mark – ignoring that domain names can’t have spaces or “moviebuff.com” had four additional non identical symbols.).

In the 36 or so arguments of defendant’s that the court obliterated was the argument that, as the defendant registered the domain name moviebuff.com in 1996, and as this was prior to plaintiff’s registering the trademark MovieBuff in 1997,defendant wins on the ground of prior use. The court rejects this argument on exactly the same grounds that subsequent courts will reject this court’s holding:if it can’t be seen, it’s not “in use in commerce” as required for a trademark violation.

Registration with Network Solutions, however, does not in itself constitute "use" for purposes of acquiring trademark priority. The Lanham Act grants trademark protection only to marks that are used to identify and to distinguish goods or services in commerce -- which typically occurs when a mark is used in conjunction with the actual sale of goods or services. The purpose of a trademark is to help consumers identify the source, but a mark cannot serve a source-identifying function if the public has never seen the mark and thus is not meritorious of trademark protection until it is used in public in a manner that creates an association among consumers between the mark and the mark's owner.

Brookfield ¶ 7. If it can’t be seen, then it’s not “in use” - hold that thought until we get to the next scenarios.

So after about three hours of reading about how MovieBuff was prior to MovieBuff, but different than MovieBuff, and therefore the use of the domain name moviebuff.com was a trademark violation, you get to the tagged-on argument about metatags (in other words, defendant had not just lost by this point; defendant had been beaten into a pulp by the court). It is now firmly established in the court’s opinion that plaintiff can do no wrong and defendant can do no right.Obnoxious defendant (the one that had been using the phrase “Movie Buff” for five years prior to plaintiff’s use) dared to visibly label its goods and services with the domain name moviebuff.Now the court considers whether defendant can use a stealth trademark in its metagags as trigger-term for search engines.The public cannot see the mark; there is no visible association between the stealth-mark and the defendant’s good and services.But the defendant is evil!The Court must bend it so that defendant has been bad once again, and therefore articulates the doctrine of Initial Interest Confusion in terms of metatags:

Web surfers looking for Brookfield's "MovieBuff" products who are taken by a search engine to "westcoastvideo.com" will find a database similar enough to "MovieBuff" such that a sizeable number of consumers who were originally looking for Brookfield's product will simply decide to utilize West Coast's offerings instead. Although there is no source confusion in the sense that consumers know they are patronizing West Coast rather than Brookfield, there is nevertheless initial interest confusion in the sense that, by using "moviebuff.com" or "MovieBuff" to divert people looking for "MovieBuff" to its web site, West Coast improperly benefits from the goodwill that Brookfield developed in its mark.

There’s no source of confusion; defendant this time has no visible use of plaintiff’s mark; the not-confused consumer has a results page in front of the consumer with both MovieBuff and West Coast – not-confused customer can pick the product that the not-confused customer asked for, or something else - and there will always be something else on the search results page.Because this not-confused consumer might elect to visit some other website than plaintiff’s, this makes defendant, once again, evil – and the not-confused customer is mysteriously confused as legally required.

Bad cases make for bad law.It’s clear the court did not like defendant’s use of “MovieBuff” in its domain name and it’s clear that the courts grasp of the Internet was novice at best.Brookfield was really a strong trademark-domain name case, with a weak meta-tag issue tagged on.It was an afterthought – and this afterthought set the course that many other cases followed. See, e.g., Promatek Industries v. Equitrac Corp, 300 F.3d 808 (7th Cir. 2002); Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456, 464 (7th Cir. 2000)

Not all courts, however, have bought into the Brookfield inquisition.See Site Pro-1 v Better Metal, Inc., 06-CV-6508 (ILG) (RER) (May 9th, 2007). As time has progressed, the metaphysical contradiction that the non-visible use of a trademark in one place did not constitute “a use” where in another place it did was too perplexing.

Final lark:After what must have been a costly litigation, the moviebuff.com domain, at the time of this writing, is no longer a working website!

In the next scenario, someone gets the bad idea of using stealth trademarks as trigger-terms in order to cause pop-up ads to appear!

Wednesday, May 30, 2007

Recently we were asked for an up-to-date list of ISP Trade Associations (CIX, the original ISP trade association, pictured to the right, no longer exists). Our impression is that there are not a lot of them left. Perhaps the most active ones are the WISP trade associations. There are also a few associations that show up at ISPCON.

Here is the list of ISP Trade Associations that we could confirm still exist. Did we miss any?

Thursday, May 24, 2007

Recently we heard about a locality that was attempting to tax the DSL part of Internet Service - and the question arose concerning whether the Internet Tax Freedom Act prevented this sort of thing. Well, interestingly enuf, the GAO just released a report on the Tax Freedom Act and here is what they had to say on the subject:

"Since its 1998 origin, the moratorium has always prohibited taxing the service of providing Internet access, including component services that an access provider reasonably bundles in its access offering to consumers. However, as amended in 2004, the definition of Internet access contains additional words. With words added in 2004 in italics, it now defines the scope of nontaxable Internet access as

“a service that enables users to access content, information, electronic mail, or other services offered over the Internet, and may also include access to proprietary content, information, and other services as part of a package of services offered to users. The term ‘Internet access’ does not include telecommunications services, except to the extent such services are purchased, used, or sold by a provider of Internet access to provide Internet access.” (italics provided)

"As shown in the simplified illustration in figure 2, the items reasonably bundled in a tax-exempt Internet access package may include e-mail, instant messaging, and Internet access itself. Internet access, in turn, includes broadband services, such as cable modem and DSL services, which provide continuous, high-speed access without tying up wireline telephone service. As figure 2 also illustrates, a tax-exempt bundle does not include video, traditional wireline telephone service referred to as “plain old telephone service” (POTS), or VoIP. These services are subject to tax. For simplicity, the figure shows a number of services transmitted over one communications line. In reality, a line to a consumer may support just one service at a time, as is typically the case for POTS, or it may simultaneously support a variety of services, such as television, Internet access, and VoIP." [GAO 2007 p 8]

"Our reading of the 1998 law and the relevant legislative history indicates that Congress had intended to bar taxes on services bundled with access. However, there were different interpretations about whether DSL service could be taxed under existing law, and some states taxed DSL. The 2004 amendment was aimed at making sure that DSL service bundled with access could not be taxed." [GAO 2007 p 9]

Acquired Services

"Figure 3 shows how the nature and tax status of the Internet access services just described differ from the nature and tax status of services that an ISP acquires and uses to deliver access to its customers. An ISP in the middle of figure 3 acquires communications and other services and incidental supplies (shown on the left side of the figure) in order to deliver access services to customers (shown on the right side of the figure). We refer to the acquisitions on the left side as purchases of “acquired services.” For example, acquired services include ISP leases of high-speed communications capacity over wire, cable, or fiber to carry traffic from customers to the Internet backbone." [GAO 2007 p 10]

"Purchases of acquired services are subject to taxation, depending on state law, because the moratorium does not apply to acquired services. As noted above, the moratorium applies only to taxes imposed on “Internet access,” which is defined in the law as “a service that enables users to access content, information, electronic mail, or other services offered over the Internet.…” In other words, it is the service of providing Internet access to the end user—not the acquisition of capacity to do so—that constitutes “Internet access” subject to the moratorium.

"Some providers and state officials have construed the moratorium as barring taxation of acquired services, reading the 2004 amendments as making acquired services tax exempt. However, as indicated by the language of the statute, the 2004 amendments did not expand the definition of “Internet access,” but rather amended the exception from the definition to allow certain “telecommunication services” to qualify for the moratorium if they are part of the service of providing Internet access. A tax on acquired services is not a tax directly imposed on the service of providing Internet access.

"Our view that acquired services are not subject to the moratorium on taxing Internet access is based on the language and structure of the statute, as described further in the appendix. We acknowledge that others have different views about the scope of the moratorium. Congress could, of course, deal with this issue by amending the statute to explicitly address the tax status of acquired services." [GAO 2007 p 10]